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BENCMARKING OF SUPPLY
CHAIN MANAGEMENT
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OVERVIEW
‡ About The Company
‡ Transformation of the Company
‡ Reason of the change
‡ Selection of the change made
‡ Key priorities of the company
‡ Challenges encounter
‡ Key behaviors
‡ Analysis
‡ Support to the company
‡ Bottom line
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About The Company

‡ It was established in 1928 by Paul V. Galvin in Chicago.

‡ In 1930 with mobility in mind, MOTOROLA pioneered commercial

car radios carrying the brand name.

‡ In 1960 Motorola expanded his business and opened offices and

manufacturing facilities outside the United States.

‡ In 1986 Motorola invented the Six Sigma quality improvement

process.

‡ In 2007 the company received the ³Best Corporate Citizen Award´ for
performance in governance, environment, community and employment
practices.
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Transformation of the Company

The company transformed from

multiple, decentralized business
unit-specific supply chains to a
single, integrated organization
that would seamlessly support all
business units.
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Reason of the change

‡ Seamless mobility products and solutions across broad band,
embedded systems and wireless networks.

‡ Comprised of three business that power seamless mobility: Connected

home solutions, Mobile devices and Networks & Enterprise.

‡ CEO Ed Zander saw an opportunity to improve growth and

profitability through SCM and deliver seamless mobility solution.

‡ Transforming of SCM into a single, integrated function would help

them to operate as a unified, global technology leader.
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Selection of the change made

‡ In April 2005, the company recruited 20 year IBM veteran and
executive Stu Reed.

‡ To develop and lead a transformation of the company¶s supply chain

function and turn it into a competitive advantage.

‡ They formed a new ISC organization to reach all company

businesses, functions and regions to achieve efficiency and cost
effectiveness.
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Key priorities of the company

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Challenges encounter
CHALLENGE PROCESS SOLUTION
wuickly integrating Move at record- pace to wuickly established a
four separate Motorola create a more efficient one Motorola supply
supply chain and effective chain operation that
organizations (and its organization in order to created leveraged
employees and delight customers while organization supporting
contractors representing rapidly growing the multiple business,
1/3 of the company- in business. common process and a
to one Motorola standard supplier
Integrated supply Chain quality program.
organization
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Cont..
CHALLENGE PROCESS SOLUTION
Managing the expansive The Rapid sourcing Achieved savings
global supply base initiate (RSI) is the new target. More than 90%
way of life in Motorola of our total spend is
Integrated supply chain with our top 150
(ISC). RSI is a suppliers. One example
disciplined, fact based of increased efficiency
approach to category and leveraging spend is
management that drives in one category, for
significant bottom- line instance, where we
impact for Motorola went from 170 suppliers
while ensuring product to 10 suppliers.
quality, acces to latest
technology and supply
assurance.
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Cont..
Challenge Process Solution
Measuring supply Analyzed successes and Identified six key
chain opportunities. Building the priorities for improvement
performance supply chain program in ISC transformation.
across business based on best-in-class Executing on strategies
process focus on ISC Top 6 with significant results
Priorities achieved to date, as
evidenced by AMR
ranking.
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Key behaviors
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Analysis
‡ In every second of every hour of every day , the company produced
and shipped 6.6 handsets
‡ Growth of handset shipments from became equivalent to the total
population of a city.
‡ 22% improvement in inventory turns.
‡ 30% fewer total spills
‡ Sizeable cost of poor quality (COPw) reduction
‡ 2X-defect reduction in supplier parts per million
‡ 20% reduction in factory-defective parts per million units
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Support to the company

‡ Achieving its objective of delivery of ³seamless mobility solutions´ to

customers.
‡ Helped increase in growth of handset shipments accompanied by record
company growth and profitability.
‡ Record quarterly sales of $10.6 billion, up 17 percent versus the year ago
quarter.
‡ Record handset shipments of 53.7 million units, up 39 percent versus
the year-ago quarter
‡ Global handset market share estimated at 22.4 percent, up 3.8
percentage points versus the year-ago quarter
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Bottom line
The bottom line is that by executing on top 6 priorities, the Integrated
Supply Chain organization is much more operationally efficient and
effective, further enabling Motorola¶s continued growth and
profitability. The Integrated Supply Chain served as a distinct
competitive advantage for Motorola, resulting in improved bottom line
results, while giving company the cost advantage to win! And in the
spirit of continuous improvement, the company is committed to further
increase the rate and pace at which they operate in the quest of
becoming No1 supply chain!
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